John Spratt, Chairman of the House Budget Committee, was recently appointed by President Obama to the Debt Commission. I’ve been going through documents looking at his history regarding Social Security reform, and his involvement in “secret meetings” in 1997 authorized by Clinton Chief of Staff Erskine Bowles. Bowles was at the time negotiating a deal between Clinton and Newt Gingrich that included partial privatization of Social Security.

According to Gillon, Clinton agreed to take the political heat for privatization, and the plan only fell through when the Monica Lewinsky affair exploded and Clinton was afraid to take the hit in the polls.

Gillon interviewed Erskine Bowles for the book. “Both Clinton and Gingrich had complete faith in Bowles” he says, noting that Bowles was the lynchpin of the deal and served as liaison between the two men. Clinton initially reached out to Bill Archer, the Republican head of the Ways & Means Committee, while Bowles contacted Gingrich. “They both believed that any effort to update Social Security would require government to incorporate some measure of choice, and that meant some form of privately managed account,” writes Gillon. He says the key players in these talks were “Clinton, Gingrich, Bowles, White House congressional liaison John Hilley, and Bill Archer.”

In 1997 Clinton Chief of Staff Erskine Bowles skillfully got an agreement to let OMB director Frank Raines, legislative director John Hilley, and me, along with Democratic congressional budget chiefs Congressman John Spratt and Senator Frank Lautenberg, negotiate in confidence with Republican chiefs Pete Domenici and John Kaisch. Because we were assured that what was said in the room stayed in the room, we could explore options knowing Clinton and the congressional leadership of both parties would support the final agreement.

It’s unknown what position Spratt took in those talks. But around that time, in April of 2008, the Charlotte Observer covered a speech by Spratt before the Rock Hill Chamber of Commerce (Lexis):

Spratt favors supplementing Social Security with a private savings plan that would either be mandatory “or else so attractive that everyone would sign up for it.” He also advocates investing about 20 percent of the Social Security trust fund in the stock market.

Spratt subsequently fought against George Bush’s privatization efforts, and proposed “lockboxing” Social Security and Medicare surpluses to pay down the debt.

But since that time, Spratt has indicated that he’s open to cutting Social Security benefits as a way to balance the budget. Early in 2009 Robert Kuttner wrote in the Washington Post that Pete Peterson was helping the White House in that effort, as were “leading ‘blue dog’ (anti-deficit) Democrats such as House Budget Committee Chairman John Spratt of South Carolina and his counterpart in the Senate, Kent Conrad of North Dakota.” Kuttner said that “the deficit hawks are promoting a ‘grand bargain’ in which a bipartisan commission enacts spending caps on social insurance as the offset for current deficits.”

Put Spratt down as “open to Social Security benefit cuts” and a history of support for some type of privatization.

btw, am I the only one completely unaware of the Clinton/Gingrich Negotiations story ?? srsly, I simply don’t recall it being discussed here at the Lake and have done some googling and can’t find signs Gillon’s book and it’s revelations were discussed anywhere – it was the lunacy of privatization that brought me to the blogs

So Clinton had Social Security in his cross hairs when Ken Starr found a girl under his desk. Further indictment, if more is needed, of Democratic leadership. Oh. And Monica should get the Medal of Freedom.

Bill Clinton spoke openly about the secret agreement he reached in 1997 with Newt Gingrich to take money out of Social Security and place it in private accounts — something Wall Street has been demanding in order to keep the bubble from bursting.

Oh, fine. Sell stocks to the greater fools at the peak of the bubble, the taxpaying boobs, so all the insiders can get out with a profit, then cut boobs’ benefits. Who could argue against such a “grand bargain.”

So it appears they’re determined to carve up SSI one way or another. So how do you suppose they’ll try to spin this thing to keep people from marching on the capitol with pitchforks? Some kind of under-the-radar phase-in bullshit, maybe?

Great about the book salon but everyone knows the “system” is fucked up and the plutocrats are devising strategies to make it even more difficult for the working and middle class. Maybe it’s time to bring on some of the Greeks or other European activits who are on the Acropolis today urging Europeans to rise up. How do they mobilize the people and get them on the streets opposing the policies of the plutocrats and corrupt world bankers? Maybe it’s because Europeans by and large live life on the streets and Americans live life either in their SUV, or their sofa or at a keyboard. The time for mobilization in the States would seem to be long past due.

How can we frame this so people get it? Is it the Help the The Rich To Pay the Taxes They Owe for heavens sakes you poor slobs Bill? Is it the We Need Captive Investors For Our Mutual Funds Bill? Or is it the Wall Street Needs More Mandated Suckers For Their Fraudulent Security Deals Bill?

Try ‘Give Wall Street All the Rest of Your Money So You Can Die Broke’.

Srsly, don’t these guys understand that 401(k)s and IRAs are ‘privatizing’, and they’ve lost a humongous amount of their paper value due to !@#$%^&*()_s like Goldman Sachs (aided by Geithner and Summers). And everyone who has one knows it?

In the first few paragraphs of your cited article, Summers appears as a stealth vampire seeking to move Social Security payments into Wall Street funds, working in the background like some crazy evil scientist assigned to “Special Projects” by the Clinton White House. Sheesh. I guess he’s learned now to keep his mouth shut and to turn the job over to this sock puppet deficit commission.

So if Obama does this like HCR, he will frame Goldman Sachs as bad needing to be punished by mandating that we give GS our money but having a very weak framework over what is done with it. Obama will then make GS richer while patting himself on the back and being smug. Obama is great at punishing corporations by making the corporations richer at our expense.

So much of defense spending seems like a waste – then again there seems like lots of government waste in general. Rather than getting rid of the waste (used to payoff corporate contributors), we’re the ones who have to pay the price. Just like with the Dorgan amendment.

I’d say it was more important for the oligarchy to get “their man” into office for the 2000 $election. So smear the Democrats and Clinton in particular; he did the ultimate transgression of raising taxes on the wealthy, if only bit. If Gore got in, although a DLC’r, even then, he was a thinking politician who seemed to show some measure of care to the country. He would have likely continued the debt paydown Clinton started which would have made the rape and pillage of this country much, much harder.

So, they got George shoehorned in and the wealth transfer accelerated beyond all expectations with many new opportunities to fleece the rubs with wars, housing bubbles, etc. Now, with ObamaRahma, they have the best of both worlds: a non-crazyassclown who is still a corporatist to do their bidding in a smooth measured way so the house will not (probably) burn down around them while they cement in place neo-Feudalism. win-win, if you’re on the right team. For the rest of us… slavery or death.

Everyone is exceedingly smart in hindsight. The mood in the 90s was that the sky is the limit and the stock market is what will do it in the end of time. After Bush and the financial collapse, the smart knock the past as if it were present.

Social security didn’t change much, although letting the ceiling of taxing go up might be a great idea.

One fight at a time, people should fight the Petersens who didn’t have a new idea in 50 years and still hope beyond hope to impoverish the old and the poor even further.

I would agree, but given that I’m still not sure how things are going to turn out as Obama seems to despise the average person. Like it was quite obvious at the time how people raised that Obama should do something about unemployment but he insisted on working on HCR while millions of people lost their jobs and still about the only economic statistic that he seems to care about is the DJIA rather than the unemployment rate. Obama is for instance inflating things by keeping the federal funds rate low, but that doesn’t help the average person. There’s the economic statistics of the Fortune 500 companies and there’s the economic statistics of the average person and just because the stock market is high, it doesn’t mean the average person is happy with what is going on, particularly if they’re out of a job. The Obama administration itself is painting high unemployment for the rest of Obama’s term and seem to be basically shrugging their shoulders about it.

About the most efficient means of sounding the alarm right now is for everybody, and I mean everybody, to start inundating their local papers and politicians with letters. Letters, not e-mail. The deficit commission put in place by Obams is NOT to be trusted. Not even one thin dimes worth.

AS long as Bloomberg keeps holding pressers in his red bowtie, in order to let Jon Stewart to ask him to change out of his Richie Rich outfit, I’m good with that challenge. The idea of a short, effeminate New York Jew billionaire being elected President makes for laughter in the heartland.

Everybody is missing the key actuarial point. Follow me on this one. In the year 2000, investment houses openly stated that the year 2008 would be a great depression lasting for 10 years. Why??? The actuarial numbers tell the story. The year 2000 schtick: The person who spends the most money in America per year is on average the 49 year old male. Younger people do not make enough money/older people save for retirement.

Actuarial tables showed that (at the time ) the number of 49 year old males would start to decline after 2008. Therefore spending would decline in America. In 2011, the number of people turning 59 1/2 would exceed the number of people turning 18 ( consequence: is those at 59 1/2 could begin removing money from retirement accounts faster than 18 year old contribute). IN 2013, the number of people turning 65 would exceed the number turning 18 ( consequence . . . ). IN 2013, the number of people turning 70 1/2 would exceed the number turning 18 ( consequence . . . )

The end result is that for the next 10 years the retirees will be removing more from wall street than the new 18 yr old worker will be contributing. The net result is that wall street will need a bailout. The biggest source of bail out funds is to let Social security supplement wall street, while the baby boomers retire. My biggest shock was that Clinton/Bush could not achieve this.

In summary, If we do not put money into wall street now, the older folks will pull money out of wall street faster than the young people put it in. . . the market will decline year over year (after inflation).

Conclusion: We have a shitty model to plan the future growth and retirement of this country. The Rethuglicans and corporate Democrats want to bail out wall street; the rest do not have a plan.

Solution to generate social security surpluses is simple since issue is being primarily caused due to wealth shift to upper 1% in last 3 decades.

Remove the income cap totally and to balance out resulting surpluses drop the Social Security Tax Rate from current 6.2% rate for both employers and employees at all levels. This will enable small business owners to do more hiring in this tough economy and employees will have more expendable money in their hand to spur the economic engine.

Social Security Panel is being setup such that every body will hew-haw on complicated solutions but no one will speak about this obvious simple job generating solution because it will not benefit the event organizers who want to make money by destroying this final remaining big golden goose and pulling our country into third world status.

Lewinsky deserves a medal for saving us from the “Loose 40% By Bubba Bubble” improvements to Social Security.

In other news, there is no connection between government debt and Social Security, and there is aboslutely no good reason to increase the trust fund surplus, BECAUSE defaulting on repaying monies borrowed from the trust fund is what all this is about.

Bygones Obama and his hatchetmen do not wish to tax the wealthy to reclaim the illicit gains financed by borrowing from the trust fund, and to do so they intend to cut benefits and raise contributions, which is to say that while the government proves they have no intention to honor IOU obligations to the trust fund, the trust fund will – nominally – increase again.

There is only one debt regarding Social Security: the money that the US government owes to the trust fund, debt the repayment of which has to begin within a few years as the trust fund is tapped *as planned* in 1987. By then, the government will also loose the ability to tap into the trust fund payments, to “borrow” even more from the trust fund.

Hence the desparate urgency of this whole scam. The Trust Fund and Social Security are sound for decades, it is the US budget that is not, and servicing and repaying the debt to the trust fund will make this worse. Increasing the fund to renew “borrowing” with no intention to repay past or future debt owed to the fund is the scam.